Performance management can be one of the most challenging areas for supervisors, managers, and organization leaders. It is also one of the most critical elements to the success of any organization. To maximize success, organizations must motivate employees toward a common goal. Performance management can be used for this purpose. Many managers ask, “Is a formal performance management system really necessary?” The obvious answer is “Yes!” and organizations can justify the time and cost investment in setting up a performance management system by using it effectively to achieve business objectives.

Goals of Performance Management:

  • Improve organizational performance – improve profits, quality, customer service, efficiency, and provide focus on desired results
  • Cultivate continuous improvement – identify training needs
  • Foster cultural change – link pay to performance, empower line management, motivate the workforce

Benefits of Performance Management:

  • Provides management structure – most employees prefer a certain degree of structure in which to operate
  • Provides avenues for management to be champions, mentors and coaches; creates a framework for offering encouragement, support and guidance

Results of Performance Management

For performance management to work, it must be a constantly evolving process. It must balance the goals of the organization with the abilities and characteristics of the workforce to have the greatest chance of success. To that end, a solid performance management system should undergo periodic evaluation and assessment, ultimately leading the organization to achieve desired outcomes. Performance management requires everyone in the organization to share responsibility for its success.

Develop Your Strategy

A well-conceived performance management system relies on a variety of rewards to motivate performance. The challenge is to design a system that maximizes the effectiveness of rewards, balances their use, and ensures that different programs compliment each other. To develop a strategy for your organization you must first assess:

  • Organizational objectives – What are the organizational drivers that create value? How can performance be measured against these objectives?
  • Organizational culture – How can your culture best be described? Is this culture conducive to the performance management system?
  • Business strategy – What is your organization’s business strategy? Are the rewards being offered aligned with it? Is the performance management system aligned with it?
  • Motivational needs – What behaviors need to be motivated? What rewards would be effective in motivating these behaviors? What are your competitors offering their people?

Ultimately, this journey must begin, and can only be successful with, management’s commitment to the process. Once employees see this commitment, they too will be energized to commit to the common goals outlined by the organization. For more information on developing a performance management system in your organization, please feel free to contact us.